Market news

Real Estate standstill: in last few months even two units of real estate property were not sold to foreign customers

31.07.2012

I can suppose that after reading the heading you first of all thought that this can be a mistake.
But no, there is no mistake at all.
In last few months even two units of real estate property were not sold to foreign customers – that’s true!

WHY IT HAPPENED SO?
Till May 18, 2012 everything was fine.
Starting from January 2012 and till May 18 of the same year about 9 593 of foreigners among which 4 304 Germans, 1 126 English and 862 Russians have purchased nearly 13 648 units of real estate property.
On May 18, 2012 a new law, which “facilitated” the process of real estate property purchasing for foreigners, was established. But, how could such a law make the process of purchasing easier if since that time no apartments were sold at all?!
Here is a usual situation of purchase and sale process: foreign customer liked some housing or apartment unit. He negotiated a little bit, made some terms with the vendor and then went to Land Registry Office to complete the procedure. The manager in the Land Registry Office told him: “We are waiting for a written ordinance. It was not established and published yet. For this reason we can’t issue you a certificate of allodial tenure!”
This is the main reason, why starting from May 18, 2012 any unit of real estate property can be sold to the foreigner.
Let us briefly explain how foreign citizens can purchase a property in Turkey in accordance with changes in the Law referring also all previous procedures.

FOREIGN INDIVIDUALS
From 1934 till 2006 individuals with foreign citizenship could purchase a real estate property up to "30 hectares" on "mutual" terms. More property could be bought by the Council of Ministers decision. In 2006 the real estate property area size for purchasing for foreigners was reduced to "two and a half hectares".
As a result, corrections were made. According to them:
«Individuals who are citizens of countries identified by the Council of Minister can purchase real estate property (apartment, shop, land for construction, land, etc.) in Turkey untrammeled (Form 302, Article №35 of Land Registry Office Law)».
But the general area of ​​the property purchased by foreign citizens, should not exceed 10% of the area allocated for private property, and should be not more than 30 hectares per individual.

FOREIGN COMPANIES
Foreign companies, as well as individuals, can purchase real estate property in Turkey. The relevant provision will enter into force on August 18, 2012 (Form 302, Article №35 of Land Registry Office Law). According to it, companies which were found and registered on the territory of Turkey, have 50% or more shares of companies which were found in accordance with laws of foreign countries (or have no such shares but have special rights to fire out or hire for job employees under the Agreement of Company Founding) can purchase real estate property for activities and business conducting, written in the Agreement of Company Founding positions.

WAITING FOR NEW REGULATION
A new Regulation of the Council of Ministers on the possibility of real estate property on the territory of Turkey by foreign individuals and legal companies purchasing is expected to be established.
The law was published on May 18, 2012. Today is already July 26, 2012...
Neither hide nor hair about the new Regulation…
From May 18, 2012 any unit of real estate property was sold to the foreign customers!
The law, which was aimed onto the process of facilitating of real estate property purchasing for foreign citizens, in reality only prevents the process of such property buying.
Before the mentioned above Regulation establishment, Land Registry Offices and Cadastral Management can do anything and are bound hand and foot in their expectations…